Bank sold the shirts off its racks

Lack of inventory puts crimp in clothier's sales

Jos. A. Bank Clothiers Inc. said yesterday that a four-month selling spree left the company with little on the hangers to peddle, causing same-store sales to dip last month.

Overall sales were up for the month, and they were particularly strong in catalog and Internet sales, but same-store sales were down 3.7 percent. Same-store sales, sales from stores open more than a year, are a key measurement of retailers' performance.

The news drove Bank's shares down $3.20, or 16 percent, to close yesterday at $16.75.

The company and an analyst blamed a lack of product to sell.

"For the first four months of the calendar year, sales were ahead of plans, which means inventories were depleted. It takes some time to get new orders in, so they were something of a victim of their own success, at least for this month," said Michael M. Via, an analyst for Anderson & Strudwick. "It's not a bad problem to have, if you have to have a problem."

Via said lack of inventory might affect the retailer for another month. But he expects the Hampstead-based men's clothier to restock by the end of this month or early next month.

He said the company could have better anticipated demand, although April, May and June are typically slower than other months. Fall is the retailer's heavy sales season, he said.

Via said he did not expect the dip in last month's same-store sales to affect quarterly earnings.

Overall, the company reported, sales increased 7.9 percent to $20.34 million in the month compared with sales in the corresponding period last year. Combined Internet and catalog sales were 33.2 percent higher last month than in June last year.

"Sales were so strong leading up to Father's Day that we didn't have the inventory, and that just brought our [same] store sales down," said David E. Ullman, chief financial officer.

He said inventories should be back by Bank's third quarter, which will begin next month. He added that low inventories also mean fewer sales and higher profit margins on what is left.

The company did not anticipate an impact on second-quarter earnings, which Ullman said are expected to exceed the 5 cents a share reported for the second quarter of last year.